Envestnet: New CFO a Modest Positive, in Our View

On the afternoon of Sept. 25, Envestnet ENV announced that Joshua Warren will become the firm’s chief financial officer effective Nov. 15, replacing Pete D’Arrigo. While Envestnet has done well over the years in terms of increasing its revenue, its ability to widen operating margins has disappointed investors to the point that activist investors such as Impactive Capital began to get involved. We believe a new CFO from outside the firm may bring a fresh perspective, thus we are modestly positive on the change, but it is not enough to materially alter our $54 fair value estimate or narrow moat rating on Envestnet’s shares.